First Quarter Profits Rise at Accenture; Stock Falls

Global consulting firm Accenture

released its fiscal first-quarter earnings results on Wednesday after the closing bell. In the wake of the report, Accenture shares have lost around 4 percent in after hours trade to $67.54. During regular trading hours, the stock fell 1 percent and closed the day at $70.40. Accenture shares have had a very strong year and came into Wednesday up 30 percent in 2012. The 52-week high in the name is at $71.79 and the stock has strong support below at the $65.00 level. If Accenture either rallies or continues to fall in the coming days, these two areas will be of interest to traders. The more likely scenario, however, is that the stock continues to consolidate under $70.00 heading into the New Year as Wednesday's earnings report was solid, but not spectacular and the subsequent trading activity in ACN has been mildly bearish. The company reported net income of $698.8 million or $1.06 per share, compared to $642.1 million or $0.96 per share, in the year ago period. This beat analysts' consensus earnings per share expectations of $1.04 by two cents. Total revenue in the was up around 1 percent to $7.67 billion versus 7.59 billion last year. This came in better than the consensus Wall Street revenue estimate of $7.32 billion. Revenue prior to reimbursements rose to $7.22 billion from $7.07 billion in last year's first quarter. Looking ahead, Accenture provided Q2 revenue guidance that was slightly below current expectations and also raised its earnings outlook for fiscal 2013. Second-quarter sales at the company are expected to be in a range between $6.9 billion and $7.15 billion, which compares to current consensus of $7.17 billion. The light revenue guidance is the reason that the stock has been under pressure in late trading. For fiscal 2013, Accenture now sees earnings per share in a range between $4.24 and $4.32, which is above its previous guidance range of $4.22 to $4.30. Currently, analysts have consensus earnings per share estimates of $4.27 on projected revenue of $29.41 billion for Accenture in fiscal 2013. While the company's first-quarter results were solidly above Wall Street expectations, investors are showing concern over Accenture's second-quarter revenue guidance. This should be offset to some degree, however, by the company's brighter earnings outlook for fiscal 2013. With the stock holding above the $67.00 level in Wednesday's after hours session, ACN looks like it will remain in a range between a strong support level at $65.00 and its 52-week high of $71.79. Investors will likely get more interested in the name if it can either break out to new highs or if it pulls back to $65.00 in the coming days.